OPINION: Why robust digital IP is more important than ever for the oil and gas industry

Douglas Rankin
Douglas Rankin
Opinion by Douglas RankinPartner at Marks & Clerk’s Aberdeen office

Digitisation and data are undoubtedly driving transformative change throughout the oil and gas industry, providing UK companies with a world of opportunities for further innovation and growth.

Amid this unprecedented upheaval – with some referring to data as the ‘new oil’ – it’s the industry’s most agile that are able to control the direction of the market, but they must also carefully protect their ideas in order to retain that lead.

Unsurprisingly then, digital intellectual property (IP) has become a key industry consideration.

Preservation and continuity of existing IP portfolios is vital, while challenges in realising effective trademarking, international collaboration, and co-created technology can be overcome in a much more straightforward manner if businesses have a sound understanding of what IP they own or have access to, and how best to use it.

Digital technologies in particular throw up challenges around, for example, the protection of computer code and software, technologies which may have traditionally been protected by copyright or trade secret. The energy sector, like all others, is embracing the possibilities of this technology, but also navigating the IP questions which they present.

While some complexities do still remain, patenting computer-implemented inventions is no longer considered to be something new or controversial, but in fact these type of patents increasingly represent a fundamental part of any valuable IP portfolio, whether relating to data analytics, management systems, modelling techniques, communication and control systems, or the significant recent growth in AI and blockchain IP.

It is no longer uncommon for the innovative use of data systems to play a significant part in the commercial success of a business, and patent offices are willing to recognise this.

Despite any complexities that may remain in securing such protection, the number of patents being filed in the oil and gas sector continues to rise. The latest data released by the European Patent Office reveals that patent application filings in the ‘Electrical machinery, apparatus, energy’ category grew to 10,402 in 2017, up from 10,002 in the previous year. On top of this data, there will be other oil and gas-related patents that are not formally categorised in the sector because of their digital nature. Software patents, for instance, may be aimed at the sector, but not specifically categorised as such.

So, what’s driving this upward trend of patents in the sector more generally? While digital technology is no doubt making a significant impact, much of the sector still relies on tools and devices for which traditional patents still represents the best means of protecting IP, and patenting continues to grow in this area.

However, technological development in the North Sea, for example, is now also driven by the challenge of P&A activity and decommissioning. Likewise, the race to deliver the next generation of energy infrastructure, whether relating to advanced off-shore wind turbines or smarter grids to deliver energy more effectively, is driving greater enhancement of engineering technologies. Again, patents are crucial here.

Against this transformational backdrop, we are also seeing the emergence of exciting new technologies such as 3D printing, which promise both significant challenges, and opportunities.

The emergence of 3D printing may require companies to re-asses their existing patent protection. 3D printed mechanical components – the kind of components vital to the energy sector – may circumnavigate traditional IP safeguards such as customs checks. IP drafted before the emergence of 3D printing as a ubiquitous technology therefore may not have provisions built into it to protect against this new challenge.

Oil and gas IP rights holders should consider whether their IP strategy provides protection against the unauthorised copying of design files and printing of ideas, as well as ensuring that their strategy is fit for purpose as digitisation and data continues to drive the transformative change throughout industry that we are seeing.

From the inexorable rise of the rotary drill in the 1880s, to today’s 3D printing challenges, the industry will continue to innovate, evolve, and reacclimatise – and IP will remain one of its most vital assets as it does so.